As you may recall, California was on the verge of shifting the pricing benchmark for Medi-Cal pharmacy reimbursement to average acquisition cost (AAC). See California Medi-Cal Joins the Cost-Plus Revolution for the background. California would have become the third state (after Alabama and Oregon) to alter the basis on which pharmacies are reimbursed for Medicaid prescriptions.
Governor Brown just signed Assembly Bill 97, which stripped all of the proposed language out of the bill. I'm not sure what went on behind closed doors, but the bill now only offers an intent for unspecified future legislation by August 1, 2011. See the relevant text below.
Once again, we see the challenges of controlling health care costs. Bending the cost-curve always means that someone somewhere gets less money.
There are only four months until August 1. Cry 'Havoc,' and let slip the dogs of lobbying!
Here's the relevant text from California AB 97. (See page 33.)
SEC. 97.5. Section 14105.451 is added to the Welfare and Institutions
Code, to read:
14105.451. (a) (1) The Legislature finds and declares all of the following:
(A) The United States Department of Health and Human Services has identified the critical need for state Medicaid agencies to establish pharmacy reimbursement rates based on a pricing benchmark that reflects actual acquisition costs.
(B) The Medi-Cal program currently uses a methodology based on average wholesale price.
(C) Investigations by the federal Office of Inspector General have found that average wholesale price is inflated relative to average acquisition cost.
(2) Therefore, it is the intent of the Legislature to enact legislation by August 1, 2011, that provides for development of a new reimbursement methodology that will enable the department to achieve savings while continuing to reimburse pharmacy providers in compliance with federal law.
(b) The department may require providers, manufacturers, and wholesalers to submit any data the director determines necessary or useful in preparing for the transition from a methodology based on average wholesale price to a methodology based on actual acquisition cost.
